Revitalizing rural Malawi: Experimental evaluation of the economic impacts of capital injections to village savings and loans associations

Last registered on October 08, 2024

Pre-Trial

Trial Information

General Information

Title
Revitalizing rural Malawi: Experimental evaluation of the economic impacts of capital injections to village savings and loans associations
RCT ID
AEARCTR-0014464
Initial registration date
September 24, 2024

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
October 07, 2024, 6:48 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
October 08, 2024, 2:55 AM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Region

Primary Investigator

Affiliation
International Food Policy Research Institute

Other Primary Investigator(s)

PI Affiliation
International Food Policy Research Institute
PI Affiliation
Feed the Future Malawi Growth Poles Project
PI Affiliation
Feed the Future Malawi Growth Poles Project
PI Affiliation
International Food Policy Research Institute
PI Affiliation
Feed the Future Malawi Growth Poles Project

Additional Trial Information

Status
In development
Start date
2024-09-25
End date
2026-10-31
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
This trial tests an innovative intervention to boost the lending capacity of village savings and loans associations (VSLAs) in rural Malawi. Our pre-analysis plan describes a cluster randomized control trial (RCT) in which VSLAs in treated communities will receive between $350 and $590 USD capital injection to boost the groups’ lending capacity, depending on the group size. Outcomes are assessed in five domains: financial inclusion, livelihoods, welfare, food security, and gender. The trial is designed to document spillover effects in local labor markets.
External Link(s)

Registration Citation

Citation
De Weerdt, Joachim et al. 2024. "Revitalizing rural Malawi: Experimental evaluation of the economic impacts of capital injections to village savings and loans associations." AEA RCT Registry. October 08. https://doi.org/10.1257/rct.14464-1.1
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Experimental Details

Interventions

Intervention(s)
The capital injection intervention is a component of a broader USAID Growth Poles initiative focused on specific anchor firms. These firms are expected to serve as catalysts for economic development, aiming to mobilize investments and result in positive impacts for nearby communities. The VSLA capital injections are intended to help households in nearby communities to tap into the new economic opportunities created by the Growth Pole initiative. In total, there are more than 15 growth poles (anchor firms) in which USAID investments take place. The capital injections that are part of this trial take place in communities that are in the vicinity of three growth poles: Llovo Dwangwa in Nkhotakota district located in the Central region of Malawi; Tropha in Rumphi and Mzimba districts in Northern region; and Pyxus in Dowa and Kasungu districts in the Central region.

The VSLA capital injection intervention is implemented by Women's Legal Resources Centre (WOLREC), a Malawi-based NGO, in collaboration with Palladium International, a global consulting firm with an operational presence in Malawi. The intervention grants a sum of $70 PPP per member in the VSLA group to expand their loan sizes. To qualify for the capital injection, VSLAs must adhere to specific criteria, including a 4-month loan term and an interest rate of at most 10 percent (equivalent to approximately 33 percent on an annualized basis). This capital injection program complements the regular VSLA group loans, which the groups will continue to provide under their original terms, typically characterized by higher annualized interest rates than what is offered through the capital injection scheme. Additionally, the groups will be equipped with local bank accounts to enhance security and establish a connection to formal financial services. To further support the initiative, participants will receive training in financial literacy, as well as in business and VSLA management.
The capital injections and trainings will be rolled out between November and December 2024, i.e., immediately after the baseline survey.
Intervention Start Date
2024-11-01
Intervention End Date
2024-12-31

Primary Outcomes

Primary Outcomes (end points)
Household total savings
Net income from non-agricultural businesses
Household per capita consumption-expenditures
Food security (Reduced Coping Strategies Index)
An indicator capturing women’s control over income (based on A-WEAI questionnaire)
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Took a loan in the past 12 month (0/1)
Annual share-out in the VSLA
Number of non-agricultural businesses operated
Number of days of selling ganyu labor
Number of days of hiring ganyu labor
Expenditure on agricultural inputs
Livestock assets (Tropical Livestock Units)
Durable asset index
Number of meals by adults

Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Identification strategy
We evaluate the economic impacts of the capital injections using a cluster RCT design, where the cluster is defined as the Group Village Headman (GVH), the second-lowest administrative unit in Malawi. The implementation partner will generate a list of 150 eligible GVHs. Using this list, 75 GVHs will be randomized into treatment and 75 GVHs to control before the intervention begins. The randomization will be conducted by the research team using Stata. The randomization will be stratified at the growth pole level so that each of the four growth pole areas have an equal amount of treatment and control GVHs.

The capital injection will then be provided into all eligible VSLAs in the GVHs selected into treatment. The eligibility is determined based on a VSLA mapping exercise at the onset of the project. A VSLA is eligible to receive a capital injection if it has been in operation for at least 12 months prior to the mapping visit. In each GVH, we expect there to be a significant number of households that do not belong to a VSLA. We call these ‘non-VSLA households’ and will sample these households to measure local spillover effects.

Study arms
The study will have two arms:
• T1 – VSLA households in treatment GVHs: Households belonging to a VSLA group that is eligible and receives the capital injection.
• C1 – VSLA households in non-treatment GVHs: Households belonging to an eligible VSLA group, but no capital injection takes place in the GVH.

To measure the direct impacts of the program, we will compare the outcomes between households belonging to eligible VSLAs in treated communities (T1) and households belonging to eligible VSLAs in non-treated communities (C1).

To measure the local spillover effects, we will compare the outcomes between households that are not part of eligible VSLAs in treated communities (T2) and households not part of eligible VSLAs in non-treated communities (C2):
• T2 – Non-VSLA households in treatment GVHs: Households residing in GVHs in which capital injections are taking place, but they do not belong to an eligible VSLA.
• C2 – Non-VSLA households in non-treatment GVHs: Households residing in GVHs in which capital injections are not taking place and they do not belong to an eligible VSLA.

Both control and treatment clusters follow the same VSLA – and non-VSLA – eligibility criteria, thus creating ex ante comparable groups of eligible and ineligible households.
Experimental Design Details
Not available
Randomization Method
Randomization will be done in office by a computer.
Randomization Unit
Group Village Headman )GVH=
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
150
Sample size: planned number of observations
The target sample is 2,100 households in 150 GVHs for the primary sample and 750 households in the same 150 GVHs for the ‘spillover’ sample, amounting to 14 VSL households and five non-VSL households in each GVH. To account for attrition, we add one additional VSL households and one additional non-VSL in each GVHs, resulting in a total sample size of 3,150 households.
Sample size (or number of clusters) by treatment arms
75 GVHs
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
International Food Policy Institute (IFPRI) IRB
IRB Approval Date
2024-09-23
IRB Approval Number
#00007490
IRB Name
National Committee on Research in the Social Sciences and Humanities
IRB Approval Date
2024-09-11
IRB Approval Number
NCST/RTT/2/6